Answear com S A : .com increases revenue and invests despite challenging market situation in Q1 2024.

Answear.com, a leading e-commerce provider of fashion, sports/outdoor, and home&lifestyle products in the CEE region, concludes Q1 2024.Despite the challenging market situation, as well as a period of investment in the development of the PRM brand, the Company maintained positive sales growth, and made investments related to the launch of two concept stores in Warsaw for the PRM and Answear brands.

- A difficult quarter is behind us, in which we continued to face reduced consumer demand across Europe. In addition, the situation on the Polish-Ukrainian border related to farmers' protests negatively affected sales in this market, which was one of the best so far. In addition, the appreciation of the Polish zloty against other CEE currencies and the euro lowered our results. The annual dynamics was also weakened by the high base of the previous year - comments Krzysztof Bajołek, CEO of Answear.com.

In Q1 2024, Answear.com generated revenues of PLN 289 million, up 6 percent y-o-y. Gross margin increased by 4 percent y-o-y to PLN 112 million. In turn, Answear.com's EBITDA alone (excluding PRM) was PLN 8.3 million, up from PLN 15.3 million last year.

- Despite such an unfavorable environment, we are not slowing down, all the time consistently increasing the scale of our business, which distinguishes us from our competitors, who are recording reduced sales. We, in addition to setting ambitious goals, are investing, as exemplified by the recent opening of a concept store for the PRM brand and Answear - adds Krzysztof Bajołek.

In the past quarter, Answear.com carried out activities aimed at opening the first modern Answear concept store (2000 sqm) and PRM (600 sqm) in a prestigious location - Norblin Factory in Warsaw. They combine commercial and cultural functions offering customers the best shopping experience. This has for the Company has an important image and marketing aspect for the acquisition of exclusive brands.

Answear.com has launched new branding campaigns for the PRM and Answear brands. For the PRM brand, this is the first campaign after the merger of the acquired Sneakerstudio and PRM brands, designed to acquaint the customer with the brand's vision and store offerings. Answear, on the other hand, highlights its premium offerings in the campaign.

The PRM brand has recently acquired very good brands for its offerings, including Sporty&Rich, which will be available only at PRM in this part of Europe, or brands that have not been available in Poland so far, including Maison Mihara Yasuhiro, A Bathing Ape and Neighborhood.

- In the past quarter, our profitability was burdened by capital expenditures related to the development of the PRM brand. At the operating profit level, PRM accounted for an EBIT loss of PLN 5 million. However, we can already see the first effects of the investments we made, recently we managed to acquire very good brands for PRM's offer, including those that have not been available in this part of Europe so far. We can already see measurable effects in the results. PRM recorded revenues of PLN 25 million in Q1 2024, an increase of 4 percent quarter-on-quarter. This is a good result because, due to seasonality, the last quarter of the year is the best, while the first quarter is the weakest. In terms of PRM profitability, we maintain our plan to achieve break even by the end of this year - adds Answear.com's Vice President of Finance.

Answear.com continues to premiumize its offerings. In Q1 2024 65 percent of Answear.com's offer consisted of premium brands, while brands from the entry price category amounted to only 9 percent. This has a direct impact on the average order value, which amounted to PLN 366, a y-o-y increase of PLN 31.